Question
Miss Ins Fernndez has a budget of 200 euros per month to go to the discotheque and buy pink magazines. Her utility function is U
Miss Ins Fernndez has a budget of 200 euros per month to go to the discotheque and buy "pink" magazines. Her utility function is U = X1 + lnX2, where X1 represents each time she goes to the discotheque, and X2 each magazine she reads. If the prices are p1 = 8 and p2 = 4, then what would be the change in the quantity demanded of X1 due to the Slutsky substitution effect if the price of the disco entrance increases to p1 = 16 with the price of magazines being that of the statement (p2 = 4)? The alternatives are: a) -12,5 b) 2 c) 12,5 d) -0,5 Please elaborate on your answer
THANKS :D
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